Larger payouts in sexual harassment cases – a warning to employers who fail to handle complaints properly
When a complaint of an alleged harassment, bullying or discriminatory behaviour is made, an informal response is not appropriate. Employers can be held vicariously liable for such behaviours as they are responsible for providing a safe workplace, so it is important that a complaint be handled well.
The harsher penalties we see in three prominent sexual harassment cases are evidence that the courts will not look favourably on employers who fail to respond adequately. The women in these cases suffered extreme sexual harassment and their complaints were either handled badly or ignored by their employers. As a result, the sexual harassment continued undetected or was endured to the victims’ personal and professional detriment until they sought legal action. Such inappropriate behaviours can cause as much psychological and emotional suffering as a physical injury and clearly, these courts wanted the victimised employees to be fairly compensated for having their careers affected due to badly handled sexual harassment complaints.
These decisions below were significant in that they gave proper recognition to the extent of pain and suffering of sexual harassment victims, with the women receiving substantially increased damages compared to prior legal claims that typically limited damages to only between $10,000 and $18,000.
In Victoria, a large payout of $1.3 million was awarded in damages and compensation to a female labourer who “sustained very considerable psychiatric injuries as a direct consequence of the bullying, abuse and sexual harassment levelled at her” by colleagues and subcontractors of a construction company. She was reluctant to complain to her supervisor who had also made some of the offensive remarks himself and had laughed when she complained about another worker’s offensive comment. There was also no evidence of any action taken when she later complained to the area site manager.
The judge confirmed evidence that she had been a good worker who would have likely remained employed for a reasonable time into the future had she not suffered such psychological trauma.
In a Federal Court case, a Group Financial Controller was sexually harassed on four occasions by a contractor working for her employer. She reported the incident to her boss who laughed off her complaint and told her he needed the contractor to stay on to finish a job. While her complaint was eventually taken seriously, she resigned as she could no longer continue to work there after the emotional trauma of the sexual harassment and the manner in which the employer initially handled her complaint. She was awarded almost $500,000 in damages for economic loss and pain and suffering.
Another Federal Court case gained prominence when on appeal, the sexual harassment victim was awarded $30,000 for economic loss and $100,000 for pain and suffering; a substantial increase from the award of damages in past cases. A consulting manager of a computer software company, she was the subject of repeated sexual harassment by her colleague over an eight-month period. Even when she made a complaint, he was not removed from the project they worked on together. As a result, she resigned and took another position with a lower salary. The Court’s decision, on appeal, accepted that she had to resign as a result of the sexual harassment.
In all three cases, the judges found the initial complaints had been ignored or handled poorly. When it comes to dealing with workplace complaints such as sexual harassment, an employer’s key risk management tool is a sound workplace investigation process. If employers ignore a complaint or do not investigate appropriately, they risk facing greater liability in subsequent litigation.
Workplace investigations conducted by iHR Australia are fair, impartial, prompt and thorough; bringing credibility and impartiality to the issue at hand and offers a balanced, pragmatic approach to determine the best way forward. Our proven process and approach covers any informal to significant and complex investigations into allegations of inappropriate workplace behaviour across all levels from operational to senior executive and board level. We help to strengthen your internal workplace investigations by ensuring that it is both sound and able to stand up to external testing.